Skyline Healthcare Collapsing in South Dakota, Could Dissolve Soon

By Maggie Flynn | May 1, 2018

The South Dakota Department of Health filed a motion for Skyline Health Care to turn over its assets and income after residents at its 19 facilities in the state were put at risk, TheAberdeen (S.D.) American News reported, citing court documents.

Debbie Menzenberg, a licensed nursing home facility administrator and a divisional vice president in charge of Skyline facilities in South Dakota, indicated in an e-mail to the South Dakota Department of Healththat facilities in the state have enough food and medical supplies to last until Wednesday, May 2.

She said in the e-mail that all Skyline facilities across the U.S. are entering receivership or being sold, and that Skyline will be dissolved today.

“This leaves South Dakota without a plan,” Menzenberg wrote, according to the paper. “Mr. (Joseph) Schwartz (Skyline owner) called me Friday, April 27, 2018, to state… no capital, the state needs to put them in receivership, there is no way to continue operations and all residents are at risk.”

When reached by Skilled Nursing News, Menzenberg confirmed her connection with Skyline but declined to comment further.

At the start of 2017, Skyline took over several Golden Living Centers-owned facilities in the state. All the facilities are listed on the Centers for Medicare & Medicaid Services’ (CMS) Nursing Home Compare tool as being owned, either wholly or partially, by SD Sky Healthcare Holdings LLC; Joseph Schwartz is listed as an indirect owner for all 19 facilities.

South Dakota is not the only state to experience issues with Skyline; Nebraska had to place 21 nursing homes operated by Skyline — as Cottonwood Healthcare — under receivership on March 23. Kansas followed suit shortly afterward.

A statement provided to SNN by Skyline spokesman Juda Engelmayer cast much of the blame on Golden Living for the deteriorating situation in South Dakota.

“Skyline has never owned the properties; rather, an affiliate was simply the care provider and tenant,” the statement said. “Skyline and its affiliates have been dedicated to providing quality care to the residents of the facilities, has absolutely been meeting its obligations to its staff and patients, and it has been engaged in good faith negotiations with the property owners, Golden Living, to come up with a viable solution.”

“We have extended the olive branch to Golden Living to help seek a new operator,” the statement continued. “The landlord has rebuffed Skyline’s efforts, unilaterally extended the timeline, which further disadvantaged this process, and that is what forced this issue.”

Golden Living spokeswoman Kelli Luneborg-Stern confirmed that a hearing was scheduled in South Dakota Monday afternoon regarding receivership, and that the property owners of the Skyline facilities filed a legal action in the Hughes County Circuit Court to appoint a receiver for the skilled nursing facility operations.

The court appointed Black Hills Receiver LLC as the receiver; Black Hills president Wanda Prince is gathering a team of leaders to help with the receiver’s work, Luneborg-Stern confirmed.

“Tireless” transition

With regards to the reports about the dissolution of the company, Engelmayer provided a separate statement to SNN that “Skyline has been working tirelessly for several months to transition from the nursing home and managed care industry” in various regions.

“Although a few obstacles were created by an individual property owner with locations in South Dakota, Kansas, Pennsylvania, and Nebraska, Skyline is pleased to report that these issues have been addressed thoroughly and corrected,” the statement said. “The delay, which was not occasioned by any conduct on the part of Skyline, created an unfortunately unsustainable scenario. Thankfully, Skyline has resolved every matter of contention in all respects. Skyline regrets any concern that this has caused, but will continue to keep the care of our patients our utmost priority.”

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